A. (2 points) Define the dependency ratio, d, as the ratio of those that are not employed (PN) to those that are employed (N) so that d=(PN)/N. Using the data above, compute the dependency ratio and the level of TFP, A in 1988 and 2003.

B. (2 points) Write the growth rate of output per capita, Y/P in terms of the growth rate of output per worker Y/N. [Hint: Define the population to employment ratio as d^=1+d.]

C. (2 points) Between 1988 and 2003, Vietnam enforced a two-child policy such that households could only have, at most, two children. How would such a policy impact output per worker Y/N in the short-run (during the policy) and in the medium-run (20 years after the policy)? Explain.

D. (2 points) Consider the source of growth in output per capita, Y/P, between 1988 and 2003. Use the growth accounting methodology to allocate growth in output per capita (Y/P) to TFP growth, accumulation of capital per worker (K/N), and grwoth in d^. Which factor is most important in accounting for growth in output per capita between 1988 and 2003?

Consider the following data for Australia in 2003

Table 2: Data for Australia

Year	Y	K	P	N
2003	825,000	3,475,000	20	9

E. (2 points) What is the contribution of TFP differences in explaining differences in output per worker, Y/N between Vietnam and Australia in 2003?

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Growth Rate and Level Decomposition Suppose output Y is given by the production function, Y=AK(N)1 where A is the level of TFP, K is physical capital and N is the level of employment and =0.33. Let the total population be denoted by P. We have the following data for Vietnam, Table 1: Output, Capital, Population and Employment in Vietnam Growth Rate and Level Decomposition Suppose output Y is given by the production function, Y=AK(N)1 where A is the level of TFP, K is physical capital and N is the level of employment and =0.33. Let the total population be denoted by P. We have the following data for Vietnam, Table 1: Output, Capital, Population and Employment in Vietnam